And once again, the commentary is outside the box. Here are some examples, along with my replies …

Peter C. writes "I was born Christmas Day 1941 and remember the sounds of the doodlebugs over London some years later. Today, I personally feel like everyone else felt in 1937-1939, just before the outbreak of World War II."

My reply: Doodlebugs were the world’s very first cruise missiles, specifically designed by the Luftwaffe to terrorize London. But until I read your comment just now, Peter, I had never thought much about them.

I’m not alone. Over 300 million Americans (about 95% of the population) were born too late to remember World War II beyond what they’ve read in history books or seen in Hollywood productions. Moreover, except for Pearl Harbor or 9/11, no one alive today has ever experienced a direct attack on American soil.

All this seems to be making us uniquely complacent about the global drumbeat of war and authoritarianism, including the dangers of nuclear war.

In theory, only the U.S. Congress can declare war. But when under the threat of a foreign nuclear attack, there’s simply no time for Congress to act.

That’s why, if a president wants to launch America’s 925 nuclear warheads (with the destructive power of 17,000 Hiroshima bombs), he can make that decision exclusively and solely by himself. No one can second-guess him. All of the Constitution’s checks and balances are null and void.

"The president’s authority over nuclear decision-making challenges the Constitution’s clear declaration that only Congress holds the power to declare war. In practice, the arrival of the nuclear age dismantled the traditional rules by rewriting the timelines of war. It would take 12 minutes or less for weapons fired from submarines to reach Washington, and 30 minutes for warheads from most intercontinental missiles."

The great irony of this election is that the majority of Americans don’t trust either candidate of the two major parties to make the right decisions. That means …

Unless a third party candidate miraculously wins, U.S. voters will put a president in charge of the nuclear codes they don’t trust.

Hillary Clinton is trying to make this a headline political issue — for the sake of a Democratic victory. But it’s clearly a nonpartisan issue that applies to any candidate — for the sake of all mankind.

The Most Dangerous Paradox of All

Clinton has declared she’d be ready to use nuclear weapons. So has Trump. When queried about nuclear weapons, he reportedly asked a question of his own: "If we have them, why can’t we use them?"

Meanwhile in the U.K., Prime Minister Theresa May is on the same page as both U.S. presidential candidates. Two weeks ago, when asked by a member of parliament if she would "authorize a nuclear strike that could kill hundreds of thousands of innocent men, women and children," she firmly replied "yes."

In response, you’d expect most of the U.S. media, especially The New York Times, to respond with outrage. But it hasn’t.

Quite to the contrary, in a landmark piece last week, the Times argues that, unless our leaders are truly willing to use nuclear weapons, and say so unambiguously, the nukes lose their power of deterrence. Ironically, the article concludes, any sign of presidential hesitation would make them far more dangerous.

The paradox is that their destructive power must remain so horribly unthinkable that no sane leader would ever actually deploy them. As Dwight D. Eisenhower said nearly 60 years ago, "You just can’t have this kind of war. There aren’t enough bulldozers to scrape the bodies off the streets."

The V-1 flying bomb deployed by Germany in World War II, also known as the “doodlebug,” was the first pulsejet-powered cruise missile. Today’s modern missiles, including those fired last week by North Korea, are far more advanced, but still use some of the same technology.

Here’s the most recent irony …

Last week North Korea, the world’s newest nuclear power, fired cruise missiles into the Sea of Japan. But the news could not compete with election campaign headlines. Muted statements of global outrage were barely heard. And unfortunately, the lessons of the doodlebug remain, as before, mostly forgotten.

Heinz K. writes: "Despite the Western world’s ridiculous overconsumption (driven by government) … full employment will assure total poverty for all. It’s time to think for oneself and ask questions. Blind following means destruction."

I take it that your words "blind following" are intended as a not-so-subtle reminder of Nazi Germany.

That seems to echo the comments of Hewlett Packard executive Meg Whitman, who recently noted that democracies have seldom lasted longer than a few hundred years. She warned that those who say "it can’t happen here" are naïve.

Whether you agree with her politics or not, you’d be hard-pressed to find a majority of voters in either party who strongly disagree with her warning.

What nearly everyone seems to be missing, however, is the connection you make to the government’s push for never-ending prosperity. The fact is, it’s actually not hard to connect the dots from …

The Fed’s over-the-top money printing to …

The nation’s unprecedented concentration of wealth to …

The most dramatic political polarization since the Civil War.

More on this in response to the next reader comment …

Xiao-Ming points out that the "overall trend of extreme wealth concentration in many parts of the world is worrisome. But I am more worried about the trend of the shrinking middle class in America. This only leads to social instability as we have started to observe in the last couple of years."

Yes! Social instability as depicted by the black bars of this graph — the most extreme wealth concentration in a century.

Black bars = percentage of America’s wealth held by the top 0.01% (one in ten thousand households). Red line = proportion of votes in the U.S. Congress cast strictly along party lines, typically disregarding the actual issues. For a full explanation, see Next Black Swans.

But that’s not all. In tandem with the wealth concentration, we are also witnessing political instability in the form of the most extreme division and dysfunction since the American Civil War.

I agree that Black Swan shocks can come from almost anywhere. But I disagree that gold and silver are the only game left. Right now, the shocks — and fear of more to come — are still driving global capital into U.S. stocks, especially those with the strongest balance sheets and earnings track records. But as Mike Larson points out, how long that lasts, of course, remains to be seen.

Greg writes "Martin, it sounds as if the EU had expectations that they could totally socialize Europe. The countries that truly want to maintain their sovereignty should stop fighting each other and focus on saving us all from a totalitarian one-world government."

I agree that’s the underlying rationale behind Brexit and similar movements in major Western European countries. It’s all about freedom and autonomy. It’s a powerful popular demand that’s rapidly gaining momentum. And it adds great credibility to Larry Edelson’s 2013 forecasts of civil strife and decline in Europe. All strong reasons to continue following the Great Money Tsunami of flight capital to safer havens.

Thomas S: "Terrorist attacks are no longer Black Swans. Remember how the European Union and the IMF cracked down on Greece to bail them out. Now they’re seeing the results."

I get your first point: Although no one can pinpoint where or when they will occur, terrorist attacks have unfortunately become more predictable overall. Their shock value is declining. And much of the world is sinking into a stupor of eerie indifference.

But I don’t get your second point. What’s the connection between the IMF crackdown of Greece and terrorist attacks?

Here’s how I see it (and maybe what you’re trying to say as well):

The massive EU bailouts of Greece have made virtually no one happy. Most citizens of Germany and other richer EU nations were livid that their tax dollars were thrown down a bottomless pit. Most citizens of Greece were equally angry at the Draconian restrictions on their freedom to continue spending.

All justified by the EU authorities as "necessary sacrifices" to keep the European Union together!

But now, after all those sacrifices have been made, Britain suddenly decides to stab the EU in the back with a knife that’s far bigger than any Greek default!?

The end result can only be the demise of the euro and still more flight capital rushing to safer havens like the U.S.

Perttu H., writing from Finland, seems outraged: "What are you talking about? What kind of safe haven is the U.S., with its economy soon going to collapse?"

Despite its troubles, the U.S. is still widely perceived as a safe haven by global investors fleeing Europe, the Middle East and beyond. And it’s that perception that is what’s helping to boost the U.S. economy, currency, stocks and bonds.

Whether that view of the world is ultimately correct or not is another matter entirely. Indeed, the "strengths" of the U.S. economy belie its greatest weakness: An overreliance on the superdrug of quantitative easing, leaving enduring side effects that could be worse than the original disease.

Mike W. comments: "What a shame you don’t have much idea of the real reason for Brexit and the rest to leave the EU! It isn’t about money, but that helps!﻿"

Mike, you don’t tell us what you think the real reason is. Are you talking about immigration? National independence in general? Those issues are more directly connected to money than most people may think. I’m talking about …

Money decisions at the top by the European Central Bank. And …

Money consequences at the bottom in terms of the impact those decisions have on jobs, the cost of living and much more.

Peter M. explains it this way: "The real problem in Europe, hardly discussed in the Brexit debates, is the euro. A common European currency will only work if all participant economies are of similar wealth per capita. This is not so in Europe, and countries like Greece have no realistic way of adjusting by devaluation. The U.K., in contrast, is not in the euro and has not been locked into an unrealistic exchange rate."

Good point! If more than half of U.K. voters decided to abandon the European Union even without being a part of the euro, imagine what other EU members will do in order to get relief from their euro headaches.

Bottom line: No one can predict the outcome of these frightening trends. No one can be fully prepared for everything that might possibly happen. But as investors, there are very concrete steps you can take right now:

First and foremost, build your cash reserves.

Second, make sure your cash is kept in a safe place. (To check the safety of your institutions, or to find the safest ones in the world, go here.)

Third, be sure to hedge against declines, following my guidelines in this free guide.

Pam writes "I could not get the video to play past the first 30 seconds. Tried all links."

P.S. Thank you VERY much for your comments and your interest! The Next Black Swans has now topped 20,000 views and is still going strong.

Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.

{36 comments }

johnMonday, August 8, 2016 at 8:18 am

Martin
I dont believe in all this ballyhoo about the collapse of the EU>> The reality like the UK is now beginning to understand is that we are now in a global economy and the smaller countries will be battered by the big blocks. The EU as a concept is still strong but like all economic models it has to adjust to the changing world and reset ir compass to a more modern union ? I belive this will happen and the EU will again be much stronger in the years to come!
I think the US has bigger problems than EU and its federal structures/policies and currency union will save it>
I think Brexit will be the UKs black swan but will take years to recognise the mistake !
John

ianMonday, August 8, 2016 at 12:07 pm

dear john,I believe Brexit is a white swan,just think you now have the world to trade with,no hindrence from the EU,make our own mistakes,if any,after all Germans still want to sell thier cars to us,France sells wine so does Australia,I think better wine,everybody wants to sell,now we can pick and choose,and now we have stopped the dictatorship from EU and we can save a bundle of cash and protect our borders,we could not even throw out known terrorists,come on get a life.

MichelMonday, August 8, 2016 at 12:17 pm

Agreed. Given the choice between being in a boat which is in poor condition & leaking, or diving overboard in shark infested water…….well you know the answer

GaryMonday, August 8, 2016 at 8:50 am

I don’t believe that there is going to be a actual brexit. The new P.M. & parliament are avoiding the vote. The people’s voice is being ignored.

Chuck BurtonMonday, August 8, 2016 at 10:26 am

I think you are correct, Gary. The politicians know (most of them) that the cost of Brexit is a collapse in the British economy, and that voters will blame it on THEM. ‘Can’t have that, can they? They will do anything necessary to prevent the exit from ever happening, and try, at the same time, to blame it on opposing Parties.

ianMonday, August 8, 2016 at 12:19 pm

Hi Gary,I voted to leave and somehow Im coming to same conclusion,talk about dragging their feet,but if they dont I can see big troubles on the horizon

PeterMonday, August 8, 2016 at 9:09 am

Martin, with respect, Britain has not suddenly decided to stab EU in the back. The union was never popular with the Brits. Farage has been figting for 17 years for Brexit. The truth is that, like Iraq etc, there are far too many different cultures being thrust together in a political and economic union. The original notion of a common market between relatively similar economies was probably sound enough but this mad expansion even into middle eastern countries like Cyprus is doomed. And rightly so

Russia and ChinaMonday, August 8, 2016 at 9:22 am

At 85 I clearly remember WW II from Pearl Harbor, where I was and what the day was like, to the end and I also consider 9/11 as a direct attack on our mainland. I also know that our wealthy were willing to accept very high taxation to pay for WW II and today seem unwilling to accept the level of taxation that is required. Or perhaps, it is the GOP in Congress that is unwilling.

F151Monday, August 8, 2016 at 11:21 am

You can tax the wealthy for everything they have……and it would amount to nothing but a pittance compared to the debts were are incurring daily. Our National Debt has doubled in the last 7 years to almost $20 Trillion. People need to understand the magnitude of this debt…it will not go away quickly by just “taxing the rich”.

VinmanMonday, August 8, 2016 at 6:50 pm

F151

True the debt will not go away by simply taxing the rich because they will spend that also ! All this talk about free education for everyone when we are 19 Trillion in the Hole is just one example of how they intend to spend the money by taxing the rich ! So they do not intend to spend one penny of any new revenues on reducing the Debt .

VinmanMonday, August 8, 2016 at 6:54 pm

Also I believe Chavez from Venezuala either taxed his rich people to death or just plain took there money and property to redistribute the wealth and when all the wealth was redistributed everyone except govt cronies is now poor and even more Horrifying they are eating there pets and animals from the Zoo just to stay alive !

daniel johnsonMonday, August 8, 2016 at 10:17 pm

THE TAX RATE OF 92% PAID OFF WWII, PROVIDED THE GI BILL, PAYING COLLEGE TUITION AND PROVIDED LOW INTEREST HOUSING LOANS. IN ADDTION PROVIDED MONEY TOWARD THE INTERSTATE HIGHWAY SYSTEM . AT THE SAME TIME WITH SUCH A TOP TAX RATE THE NATION PROSPERED. MONEY COLLECTED BY THE GOVT DOES NOT DISAPPEAR IT GETS SPENT IN THE ECONOMY .

swamp yankeeMonday, August 8, 2016 at 3:31 pm

Very salient points R & C…

ricMonday, August 8, 2016 at 3:33 pm

Why did you title this comment with “Russia and China”? It was Japan which attacked Pearl Harbor, and it was the middle east people that carried out 9/11. Are you inking and suggesting for today’s rich people to pay more taxes, so that the US can start and fund new wars with Russia and China? This is a bad idea, IMO, as if there are not enough enemies already, and there is a need to make more enemies.

thomasMonday, August 8, 2016 at 9:39 am

focus on brexit and crexit. it is certain that the us and britain have much in common. the immigration issue delineates this accurately and will probably determine who controls our nuclear strike force.

Dirt FarmerMonday, August 8, 2016 at 10:11 am

Heinz K. writes: “Despite the Western world’s ridiculous overconsumption (driven by government) … full employment will assure total poverty for all. It’s time to think for oneself and ask questions. Blind following means destruction.”
Please explain how full employment assures total poverty for all!

Joan MangesMonday, August 8, 2016 at 10:28 am

May I inform you early in WW11 Japan landed forces on Alaska’s Aleutian Islands with plans to march down along the coast and into the States.
I know for sure because after these forces retreated my husband (now 90 years young) was in the US NAVY flying PBM’s. HE was based, for a while, in that area to fly air-sea rescue and keep Japan from a second try to occupy.
I am 88 and on Pearl Harbor day. I was listening to the radio and ran into the kitchen to tell my family. NO ONE BELIEVED ME until i insisted they come into the living room to hear for themselves..
YES both Husband and I have very MANY memories mine going back to the depression.
In the late 30’s My father had a design and production factory and worked closely with the ARMY and NAVY.
When my Husband was discharged he got a job with my father who was still working with the “army”. (Yes, I worked in the “FACTORY” all spare time)
SOME OF US ARE STILL AROUND
Joan & Milton Manges

SteveHMonday, August 8, 2016 at 10:33 am

There are many reasons why different people voted for Brexit:

The main one being that the populace disliked unlimited free entry to the country by illiterates from the Third World, many unable to speak English. They obviously wish to live on welfare for the rest of their lives(and also petty criminality, the prison population of foreigners is way out of proportion to their numbers).
Other reasons include that our politicians just say “Blame Brussels” as soon as anything goes wrong, our politicians are unwilling or unable to fix any of the major problems-poor communications, bad education, overcrowded health facilities –and there is no way that the British voters can sack Brussels politicians.
Brussels wished to garrison Britain with units of an “EU Army”, so obviously Brussels had plans for Britain’s future that the Brits would disapprove of [ imagine the USA being garrisoned by units of the Venezuelan Army?] .

From now on Britain can make its own choices. Good or bad.

A new era has commenced!

GordonMonday, August 8, 2016 at 10:39 am

Ian
Yes money is being driven into the US stock market at unpresedented rates. Did you perchance follow the news today. Markets are breaking all time highs while guess what the exports and imports of China are FALLING buy more Chinese stocks.
England is investigating Air Bus for FRAUD are you buying into this one??
The US is investigating Audi for guess what? yes illegal software the same as VW. Here are two prime stocks to buy.
Amazon Japan is under investigation for breaking anti-trust regulations WOW buy into this one.
My point is that can you as an investor really trust any of these large corporations with all or part of your hard earned life savings? These companies are not being driven by old fashioned profits but GREED plain and simple. You are similar to a voter today. They want you to buy their stock and then disappear so they can do the dirty.

Chuck BurtonMonday, August 8, 2016 at 10:39 am

Hilary strikes me as being coldly rational, at least by her standards. Donald seems more to allow emotion to dictate his actions, with a nod to money. One of these people is going to have a finger on the Button for the next 4 years, at least. Barring some Black Swan, we are going to have to live with that. Or die.

Chuck BurtonMonday, August 8, 2016 at 10:43 am

Maybe that’s why I don’t like either choice.

CraigMonday, August 8, 2016 at 11:36 am

Please tell us what has historically happened after national financial collapses. How do they come up with a new currency/barter system an how do they rebuild/recover, if at all.

JamesMonday, August 8, 2016 at 11:37 am

Learn from what’s worked in the past, this may seem trite and self evident, when stresses appear it is all too easy to ignore the lessons of history, when change is not necessary, it is necessary not to change.

MichelMonday, August 8, 2016 at 12:15 pm

A few home truths about misplaced opinions on the Euro
1. The wealth should have been shared between all states within the Euro currecy union. BULL…the level of wealth inequality beween various states within USA both now & at least since the end of the Civil war shows that inequality of wealth between states within a Union does not trigger break-up. Inequality of wealth between people WITHIN EACH COUNTRY/STATE does create social conflict
2. Euro requires a homogeneous tax system, the failure to create such a system is the recipe for its demise. BULL… In the USA, a federal income tax system, very light by European standards, is the only uniform tax. Each state of the USA has different tax raising strategies mixing Income Tax, Company Profits Tax, Sales Tax, Property Tax. Europeans would be astonished to learn that certain states of USA have no income tax.!! While another state has lower Company Profits Tax than some tax havens
3. If the Euro is the cause of all evils, why are not all the countries in Europe suffering equally? The cause of recessions and inequailty is due to demographics (OLD/Young) The southern countries of Europe have lousy demographics, the Northern Countries have positive or at least “break-even” demographics

the “black swans” are frequently the unexpected symptoms of the impact of the disease called “degrading demographics”

OwenMonday, August 8, 2016 at 1:52 pm

The nice thing about living in southern Africa is that no one will probably fire a nuke at us. However, the bad news is that when everyone else has destroyed their backyard they will move down here and give us a migrant problem of note.

Not sure if I would prefer your problems or ours. At least you have the lights on all of the time BUT do you really want to see that nuke coming at you?

Fred PenningtonMonday, August 8, 2016 at 3:27 pm

A word of warning stated in Germany in 1949, by our house keeper when I was still 9 years old; “We didn’t know how bad it was until we couldn’t get rid of him.” We are repeating the same things that happened in Germany; lies, and following orders!

SteveMonday, August 8, 2016 at 10:47 pm

I believe that the reason for Brexit was due to exactly what has been happening in the USA since Bill Clinton signed NAFTA in 1994. As Ross Perot predicted would happen in the USA as he ran for President. He predicted that we would hear a giant sucking sound as Tens of Thousands of Factories would be moving out of the USA. This is exactly what has and is continuing to happen. With a search you will find that at least 50,000 factories and corporations have left the US since 2001, and it goes as high as 100,000 companies that have outsourced overseas since. At the very same time our borders have been opened up with people with work Visas flooding our borders to compete for the very few jobs that are nonexistent after 22 years of NAFTA. Up until NAFTA, the USA was the Number 1 Industrial PowerHouse of the entire World. Now we have lost the Wealth Engines that kept our debts low and our Employment high. The results of NAFTA have brought the USA from a peacetime balanced budget during Clinton to extreme deficits at home and abroad that we can no longer afford because our Wealth Engines were sent away. The result is our REAL UNEMPLOYMENT is at least an extreme 24% of the population looking for work while there are no jobs to be had. Along with extreme amounts of people Under Employed. Another result is that our Middle Class taxes are being raised not to mention the extremely Affordable Care Act (LOL) is the largest mandatory Tax increase in the history of the USA since the Social Security Tax. The problem is that we the people aren’t even done with what is coming our way. A candidate that was pushing the New TTP trade agreement in 2010/2011 which will be NAFTA on STEROIDS. Hillary has stopped pushing TPP while she is trying to get in the WH today. I bet money that the TPP will resume upon a Hillary Presidency. The US is only an Economic Shadow of it’s former self today. Besides TPP we a have World Currency Reset looming in the near future. I mourn our once Great Country called the United States of America. In closing, I believe that BREXIT is a crystal ball of what the USA has been going through and that England was smart enough to declare that they want their Nation back complete with Borders and Security in tact. Sorry for the rant…

VinmanTuesday, August 9, 2016 at 7:58 am

Steve

I agree the TPP would come to fruition and kill off what manufacturing we have left . Trump clearly understands this and told the people of Detroit why the TPP must not be allowed to pass . Trumps speech was excellant as he outlined what happened to Detroits auto business due to the age of Globalization !

VinmanTuesday, August 9, 2016 at 8:00 am

OOPS meant to say ! I agree the TPPP would come to fruition under a Hillary Clinton administration and kill off what manufacturing we have left .

John DraughonMonday, August 8, 2016 at 11:28 pm

What Perttu H., writing from Finland was talking about was the US ECONOMY, not the stocks, bonds and the like mentioned in Dr. Weiss’ reply. As Yanis Varoufakis says in his book “And the Weak Suffer What They Must?”, the US has deliberately replaced performance from its economy with financialization since 1971 in order to maintain global hegemony. The results can be seen in stagnant wages in the US, social unrest and economic decline papered over with paper “assets” which will end up crashing.

A question for Dr. Weiss….Once paper “assets” reach outer space and have nowhere to go but down, will not contrarians have there day as assets in countries with a REAL ECONOMY and trade surpluses like China, Japan and Europe become the only game in town?

VinmanTuesday, August 9, 2016 at 8:04 am

John

I wonder when paper assets reach outer space if anyone will be able to get out and not suffer a loss due to hyperinflation just like what happened in Zimbabwe ?????

Erwin H. TenglerTuesday, August 9, 2016 at 4:40 pm

Dear Martin,
I am subscribing to four well respected investment letters, but I must say that your analyses and those of your associates seem the best researched, the most balanced, and the ones that make the most sense. Thanks very much. Erwin

Michael NwaforWednesday, August 10, 2016 at 8:08 am

I am actually indifferent to all the war mongering. The beautiful thing about the next war is that we all will probably be dead…rich and poor. If the so called demagogues want…bring it on.

Angelo FragapaneSaturday, August 13, 2016 at 10:42 am

Martin, old buddy,

the Hiroshima atomic bomb was dropped on my 19th birthday, August 6, 1945 and I went in there six weeks later.

What I saw there that day scared the hell out of me and till this day, over 70 years later, it still causes me sleepless nights.

The only way these weapons will be used in future conflict would be by countries like N. Korea to launch them in a suicidal last effort and this can be contained.

There is a COMMON DENOMINATOR; we live on a planet of finite resources. If mankind is to survive,five billion consuming, non productive and polluting “Walmart People” will have to be eradicated and the PIPS (people in power) are in the process of bringing this about!!

kingscairnSaturday, August 13, 2016 at 9:08 pm

the stock market will crash way before the gold… golds going higher, wayyy higher 1

Francis RMonday, August 15, 2016 at 7:20 am

President Woodrow Wilson accepted a financial incentive from enemy British bankers then gave them control of the very lifeblood of the USA it’s money supply. They have been printing US Dollars since December 1913. Forming the Federal Fractional Reserve Bank.
That’s why the USA has no real official currency. They have a legal tender US dollar. The contract to control US money expired in December 2013. However the Fed has refused to budge. J F Kennedy issued Executive Order 11110 declaring the Federal Reserve illegal, He replaced the illegal dollar with the Kennedy silver dollar and gave 100% control of the new debt free